The Auditor Has Decided to Use Systematic Selection of Cash

question 6

Multiple Choice

The auditor has decided to use systematic selection of cash payments when testing the control that cheque payments are supported by a supplier's invoice, a purchase requisition and a goods received note. Each cheque comprises a sampling unit. There are 5000 cheques drawn (numbered 1-5000) and the total amount of cash payments is $10 million. The sample size is 20 and the random start is 127. Given this information, the sample interval is:

• A) 500 000.
• B) 250.
• C) 127.
• D) Some other amount.

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Definitions:

Phobic Responses

Excessive and irrational fear reactions to a specific object or situation, significantly impacting an individual's daily life.

Classical Conditioning

The phenomenon of learning via repeated combinations of two stimuli, causing a response that was first caused by the second stimulus to end up being caused by the first stimulus.

Operant Conditioning

A process in which learning occurs by modifying the strength of a behavior using rewards or punishments.

Compulsion

The irresistible urge to perform an act repeatedly, often as a way of relieving anxiety, which constitutes part of obsessive-compulsive disorder.